Rental Housing Amendment Bill [B56-2013]: Public Hearings

Meeting report

Rental Housing Amendment Bill: Public hearings
Chairperson’s opening remarks
The Chairperson noted that the purpose of today’s meeting was to allow the Committee to listen to public inputs on the proposed amendments being put forward by way of the Rental Housing Amendment Bill (the Bill). The process followed a constitutional obligation of Parliament, to ensure there was public participation in every legislative process. The process was guided by Parliamentary rules. The public was given ample time to make submissions. Although the normal period for submissions was two weeks, which meant last submissions were supposed to be on 13 December, even in January the Portfolio Committee still gave the public an opportunity to make comments.

The Bill sought to amend the principal Act, and this was originally set out in the 2011 amendments. She explained that the Rental Housing Act (the Act) was promulgated in 1999, then there were amendments in 2007 related to governance issues. With the submission of this Bill, other aspects also were being addressed. She explained that this Committee had undertaken its oversight responsibility and listened to the communities, and sat with them regarding their rental challenges. For these reasons, the Portfolio Committee went to government to ask that there be expansion on the amendments to the principal Act and make other sections user-friendly. The Bill also put emphasis on rental tribunals, and she said that these tribunals were supposed to be established a long time ago by government, but the process was very slow. However, the majority of the provinces had established their tribunals.

When the Department submitted reports to the Committee on the work of rental tribunals, the Committee had been quite satisfied, as they appeared to be taking their jobs seriously, with just 16% of the cases that were not dealt with within the legislated timeframe. The tribunals were very determined to do their work. That was why the Committee had looked to and asked for improvements to the tribunals. One of those concerned the future functioning and form of the tribunals. For instance, not to unduly delay matters, three members could, for instance, may go to the North of Johannesburg and two to the South of Johannesburg, but the decision would be regarded as “the Tribunal decision”, for those subcommittees would then come back and have the issues discussed and ratified.

Finally, the Chairperson noted that the Committee would give feedback on all the submissions, once the Committee had deliberated.

Dumisa Investment submission
Professor Bonke Dumisa, Executive Chairman, Dumisa Investment, said it was important that no legislation undermined the Constitution and all rights and obligations were linked and in line with the Constitution. Section 14 of the Consumer Protection Act (CPA) was very important when it came to lease agreement. The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act of 1999 (PIE) limited the landlord’s rights to evict tenants even when the landlord’s own rights were being undermined. The National Credit Act (NCA) needed to be taken into consideration. But in all of this, the overarching principle should be the Preamble of the Constitution. Section 26 of the Constitution was also highly relevant. It gave everyone a right to access to housing; it did not give them a right to housing. In most cases people did not seem to understand there was a distinction. Tenants unlawfully abused the landlord's rights, under misapprehensions as to what section 26 actually meant.

He felt that the revised section 4B (2) was confusing as all tenants were entitled to a refund, but how the section was phrased created confusion. The provisions of section 4B (9) were always a problem in tribunals, and there also needed to be clarity on that.

The way that some of the subsections were arranged were not clear and needed to be perhaps worked on.

Prof Dumisa said that, entrenched in our society, was the misconception that landlords were rich corporates and tenants were poor and vulnerable. In one case in KwaZulu Natal there was a tenant who had a monthly rent of R14 000 for a penthouse in uMhlanga and had not paid rent for six months. There needed to be a balanced relationship between the tenant and landlord.

Pre-inspections of property before a lease was signed needed to be addressed to avoid battles over the refund of the tenants’ deposit. The Bill’s wording should be precise on the pre-inspections, and he suggested that perhaps it should say that tenant and landlord should jointly inspect the property before signing the lease or moving into the dwelling. A lot was done to cover the tenants, but not enough for the protection of the landlords.

He also felt that the changes to section 9(1)(a) could be rephrased. He felt that the chairperson of the Tribunal should have a legal background; there were a lot of legal matters to be dealt with the Tribunal. Also, he pointed out that the revisions to this section did not deal with the appointment of the deputy chairperson.

He believed that the new section 17A was weak, and suggested that the drafters would do well to reflect wording similar to that of the Medical Schemes Act which dealt with the appointment of the appeals board to deal with some of the complaints. He believed that it presently undermined the process.

Discussion
Ms M Njobe (COPE) asked Professor Dumisa, if he felt that section 17A was weak, how it could be strengthened. His other comments on other sections were quite helpful. She also wanted him to specify more exactly how he believed that sections 17 and 17A were undermining or conflicting with each other.

Ms G Borman (ANC) said Professor Dumisa spoke with great passion for this subject. She noted his point raised about section 4B, where he had stated that the tenant and the landlord should jointly (before signing the lease) conduct an inspection of the property. He had suggested that it did not tie in with the current wording, which related to registering defects or damage. She asked if he was suggesting rather to use the pre inspection report, and asked if the registration of defects, and a pre inspection report were not the same.

Mr S Mokgalapa (DA) said Section 4B(9) spoke to the role of estate agents. Prof Dumisa had suggested that the use of such agents often compromised the refunding of deposits to the tenants, and what he gave to the Committee provided food for thought, in considering the balancing the rights and responsibilities of both the tenants and the landlord. That was a good point, as the Committee may be looking at the position of tenants as always poor and vulnerable. He asked that Prof Dumisa could “unpack” the issue of the deposit. The Committee wanted to redress any problems, and tie up with conflict resolution.

He expanded that he understood that sometimes there was no pre-inspection report, which was only discovered when the tenant wanted to get the deposit back. Although the purpose of today’s discussions was not the PIE Act, he wondered if any hypothetical cases could be cited, perhaps displaying the lack of proper implementation of the Act, or linking the PIE Act with the Rental Act, and whether that could be settled. Although it was not a direct point for discussion, there were causal effects. In relation to section 17 and 17A conflicts, he asked if Prof Dumisa was suggesting that if the decisions of the Tribunal could go to review, and the Tribunal would defend those decisions, this was undermining the process.

The Chairperson said Professor Dumisa had put emphasis on the rights of landlords, which the Committee supported, but he had not really spoken to issues that the Committee was expecting to hear. Previous legislation and practice assumed that ‘rental’ was a purely urban trend, but this was not so; there were also rental markets in rural areas where huts were standing.
She noted that this Bill was not dealing with the matter of people refusing to vacate. It was not proposed, in this Bill, that tenants must be left alone. The Committee was, however, saying that due processes should be followed. South Africa had laws and a Constitution. The Committee was not going to allow for tenants’ water, for instance, to be disconnected without due course. It was, however, emphasizing that there were other processes to be followed, through recourse to other laws. She said that there was not undue preference given to tenants, for if the tenant was “pulling a disappearing act” and the Sheriff could not serve papers, the law did allow, for instance, to have locks to a building changed.

The Chairperson stressed that the Committee, with the full knowledge of the Department of Human Settlements (DHS or the Department) had taken a decision that the PIE Act would not be amended at this stage. Its implementation was not clear. Parliament was concerned about the general trend to litigation, particularly when government was using taxpayers’ money. Parliament would prefer to see good legislation passed and properly implemented, and reports on implementation. If it was suggested that there were shortcomings in the PIE Act, then government should be establishing mechanisms to monitor implementation.

Professor Dumisa said, to do justice to the questions raised by the Committee, he would like to apply his mind to the questions so that he could give detailed responses. In regard to the comment on sections 17 and 17A, he said that the Bill was good, but could always be improved. He served as appeal committee member with the Council for Medical Schemes, which dealt with medical schemes matters, trying to facilitate so that matters did not go to court, and he thought some useful lessons from there could be implemented in the human settlements arena. He had not implied that the process was unworkable, but was rather saying that there were perhaps some better proposals, and that legislative examples from other entities could be considered.

In relation to estate agents, he said that he had been told often that estate agents were not obliged to return deposits, but he thought they were. He would send through a more detailed response on PIE Act, as it was a problem. There were many unintended consequences and abuses due to that legislation.

The Chairperson conceded that the Committee was aware of, and hoping in due course to effect amendments to the Estate Agents Act, and would make its suggestions to the incoming Committee of the next Parliament.

Banking Association South Africa (BASA) submission
Mr Pierre Venter, Chairperson, Banking Association of South Africa, said that BASA fully supported the need to strengthen and address shortcomings within the Rental Housing Act, and particularly welcomed the attempts to strengthen and improve the efficiency of rental tribunals, the need for increased levels of transparency in respect of lease agreements, and improved landowner/tenant lease governance processes.

Both the Bill and the PIE Act failed to distinguish between protecting the poor and the vulnerable. The onus was on the State to provide support to the vulnerable, following eviction. The Bill should be clearly separated into two categories and focus areas – namely, the poor and the vulnerable; and then the competitive market. He said that attempts to shift responsibility for the vulnerable from the state to the private sector would have a variety of unwanted consequences. The reports of the South African Human Rights Commission (in 2007) and the highlighted court cases had clearly placed the onus on the state to protect the poor and the vulnerable.

BASA recommended that the wording of section 2(5) be removed from the Bill, and transferred to the Social Housing Act 16 of 2008, and that the Committee reconsider the recommendations of the SA Human Rights Commission (SAHRC) hearings into evictions.

BASA noted that the new section 4B(B) was supportive of the principle that a tenant’s deposit should attract interest but the proposed amendment provided no preferred creditor protection status for a tenant’s deposit. It was recommended that the Bill should provide for a preferred creditor status framework for tenant deposits, and regulations should detail implementable guidelines.

The Bill made no provisions for a transition period or clarity in respect to existing leases. It was recommended that the proposed new section 5(1) should be deleted and leases should be subject to the provisions of the formalities in respect to leases under the Land Act of 1969.

For a proper balance to be achieved, the revised section 9 should read “one third shall be persons…”

Commenting on the new section 15, he believed that the proposed section 15(1)(fB) should be removed. There was a need for uniform norms and standards across the country.

He noted that there was a need for public consultation before regulations were promulgated, and regulations should be split into two categories – to cover the “poor and the vulnerable” and “competitive rental market”.

Finally, he thought that the new section 4B(6) should refer to the landlord’s right to obtain an order of eviction from the court.

Discussion
The Chairperson said the new section 15 did not imply that the public participation was denied. The clause referred to a situation where a law had been passed by Parliament but then when it came to the implementation of that law, it might be found that there were discrepancies, that the legislation was actually oppressing them, or there might be other problems. Often, Parliament would discover that the problem lay not with the principal legislation, but the regulations. Regulations were not supposed to change the law, only to allow for implementation of existing laws. Somehow, though, there would be divergence and this provision was aimed at ensuring that regulations would be properly aligned to the principal legislation.

Ms Borman said the Committee was concerned with ensuring, by the end of this process, that a good piece of legislation was produced. The Committee intended to ensure also that the legislation was user-friendly. She asked whether Mr Venter was suggesting that the legislation should be rewritten, explaining that when the Bill was presented to Parliament by the Department, the Members would work on expanding it, often going beyond what had originally been presented, to improve it. She enquired if Mr Venter thought that the Bill could be improved, with work.

Mr Venter said that the principal Act dated back to 1999 and at that time a number of other pieces of legislation impacted upon it, with others produced since. The CPA was one of the latter types; it provided consumers with protection and created a framework. He believed that the amendments should seek to align the principal Act (as well as the Bill) with all other related relevant legislation, to ensure that the “spider web” of all legislation that impacted upon it was taken into consideration.

Mr Mokgalapa asked if Mr Venter was suggesting that the Bill was liable to constitutional challenge in its current format. The Banking Association was raising similar issues as had Prof Dumisa, in relation to the PIE Act, and the cost and time of evictions. The Chairperson said the problem was with the implementation, and he wondered if the Banking Association agreed with that statement. The South African Local Government Association (SALGA) would probably inform the Committee that most evictions happened in the municipal areas of jurisdiction but the municipalities lacked the financial resources and capacity to implement the Act properly. In terms of the possible abuse of the PIE Act, it came down how that Act and this Bill were aligned.

Mr Mokgalapa said valid points had been made that there was a distinction between the poor and vulnerable market and the competitive market, but social housing was meant to look at the poor and vulnerable. In terms of the legislation, it was difficult, however, to make a distinction, for everything had to be encompassed from the hut in Matatiele to a mansion in Sandton.

Mr Venter said if the legislation in any way focused on the balance between the parties, then it by no means would be unconstitutional, but if subsequent regulations came through and imposed conditions on landlords that were in conflict with court cases decided at the Constitutional Court then landlords would simply revert to the courts had said and challenge them in court. He thought that the intentions behind the PIE Act were good, but in itself it was abused, and it should be restricted to its original intended purpose.

Ms Njobe appreciated that for every point raised there were proposed amendments. In regard to the public participation point, she reminded the meeting that Parliament, which was to approve the regulations, was the representative of the people. When the Minister came to Parliament and reported to MPs, this was the same as reporting to people. She wondered if it would be correct to make a distinction between the two markets, which seemed contradictory to the principles of our democracy, and said that this may perpetuate divisions in South Africa.

Mr Venter said that his wording regarding the separation of the markets may have been crude. He was suggesting that the legislation be broken into two pieces to highlight the onus of the state to protect the poor and the vulnerable.

The Chairperson said that there had been a removal of wording originally proposed under section 2(5). The reason for that section was that government had, as part of its responsibilities on implementation, come back to Parliament to report on the impact of that Act. The Minister was the executive authority of the Department, and monitoring was the responsibility of the Department. There had been a tendency for national departments to simply disburse funds to provinces and municipalities, and then, in the budget report, say simply that "9% of the budget was disbursed to province', as they did not want to take responsibility of those funds appropriated to them by Parliament.  It was a matter of responsibility and accountability.

Mr Venter said his wording regarding the composition of tribunals was also perhaps too crude, now that he understood what the Committee was trying to achieve. He said that the areas of differing expertise would make sense.

Mr Mokgalapa referred to the SAHRC reports, and said that the question was really who took responsibility for the recommendations.

Legal Resource Centre (LRC) submission
Mr Steve Kahanovitz, Attorney, Legal Resources Centre, said many South Africans, who could otherwise not afford housing, relied on rental housing to fulfill their Constitutional right to adequate housing and it was correct to have a more effective legislative framework to protect their rights. The Bill included many positive steps towards ensuring decent affordable housing for those who rented their accommodation.

He noted that where the Rental Housing Tribunals (Tribunals) had been established, they had provided a large number of people with an accessible dispute resolution mechanism. Figures provided by these Tribunals showed that there was a high demand for the services that they could provide and also proved that the Tribunals were effective in resolving disputes. Considering the vital role of Tribunals, the Committee should take steps to ensure that they were independent of provincial departments.

Currently, section 17 of the Act only allowed for appeals against Tribunal decisions by seeking a review before the High Court, but considering the prohibitive costs involved in such a review process, this rendered justice inaccessible for many. Therefore the LRC supported the Bill’s creation of a dedicated and easily accessible and low-cost body to hear appeals. There were concerns, however, over the current proposed design of the appeals body.

The use of Tribunals had experienced tremendous growth in recent years and it could be anticipated that the number of complaints brought to the Tribunals would continue to increase. This growth would place great strain on the current structure and they may soon be unable to address the complaints timeously and would face increasing backlogs. The LRC proposed that the Committee consider reconfiguring the minimum requirements, in order to reduce the number of members required for the Tribunal function. Also, the Tribunal Chairpersons should be encouraged to allocate complaints to one to three members, depending on the complexity of the matter in question. Furthermore, instead of the requirement to have three members present to hear a case, perhaps one member could hear a case alone. That would also reduce the costs presently incurred by having three (or more) member teams. In this regard, perhaps the Committee should consider the Commission of Conciliation, Mediation and Arbitration (CCMA) model.

Regarding the proposed new section 9, he suggested that these requirements may be overly burdensome on the MEC and may even inhibit the ability to select the best possible candidate for the Tribunals. The MEC should still be able to exercise discretion to select any candidate who had one of the qualifications mentioned.

In regard to the proposed new appeal body, the LRC was concerned that the appointment process for the body may not meet the standards of separation of powers. As presently worded, the LRC was concerned that the Tribunal would be appointing the persons who would be hearing the appeals against Tribunal decisions. Thus, the Committee should consider an appointment process for the appeal body members that matched or was even more rigorous than that of the appointment of Tribunal members. In addition, the body should be constituted of three members. Allowing a single adjudicator to overturn the decision of a full sitting of a tribunal would not be in the interests of justice, especially if the adjudicator was appointed by the Secretariat.


Turning to the new section 17A, the LRC was concerned about the lack of a deadline for either of the actions provided for under the section. It recommended that a deadline should be imposed, given the failure of the previous Minister to promulgate the regulations mandated by the Act over the 13 years that the Act had been in force. In the same regard, there had been delays in establishing Rental Housing Tribunals in every province. It was therefore suggested that the Minister be required to publish the appeal guidelines for public comment, and to promulgate them within 12 months of the Bill being put into operation. Mr Kahanovitz further commented that provinces with existing Tribunals should be required to establish appeal bodies within 12 months of the Bill coming into force. Provinces with no tribunals as yet should be required to establish appeal bodies at the same time they established these tribunals.

The proposed new sections 4A and 4B would render the law more accessible. The Committee was, however, encouraged to consider articulating the specific consequences of non-compliance with the requirement to “reduce (a) lease entered into between himself or herself and the tenant to writing.” Failure of a landlord to reduce a lease to writing should be an offence, in terms of Section 16 of the Act.

It was also noted that, thirteen years after commencement of the principal Act, the Minister still failed to comply with section 15. The insertion of Section 15(1)(fB) into the Act was commended, as this mandated minimum norms and standards regarding terms and conditions of the lease, safety, health and hygiene, basic living conditions, size, overcrowding and affordability. The section also provided for the Minister to issue regulations regarding the “calculation method for escalation of rental amounts and the maximum rate of the deposits which may be payable in respect of a dwelling.”

The LRC pointed out that there was no need for inclusion of the definition of ‘arbitrary eviction’. Section 13(14) of the Act stated that the Tribunal did not have jurisdiction to hear applications for the eviction orders, and since a Tribunal would never order an eviction, this definition was not required.

Finally, the LRC encouraged the Committee to re-insert, into this Bill, clause 2(b) of the 2011 version of the Bill (which had been withdrawn). It felt that, given the vulnerability of tenants in South Africa, removing direct Ministerial monitoring of the impact of the Act on the poor and vulnerable was a retrogressive step.

Discussion
The Chairperson referred to recommendations on appointment of Tribunal members and said that it was essentially a procedural matter, since the authority to appoint members rested with the MEC.

Mr Kahanovitz agreed that the position currently was that all Tribunal members were appointed by the MEC. However the new section 17A(3) related to the appointment of the appeal members, and here, it was stated that the Secretariat must appoint the adjudicators. This, he suggested, should be done by the MEC or by the Premier in consultation with the MEC. It would be inappropriate to have appeal members appointed by the Secretariat or the Tribunal. 

Mr Matshoba commented that the proposal to split the Tribunal into two teams was to ensure a fast resolution of cases, but the final decision was still to be made by the whole Tribunal, not the sub-committees.

Mr Kahanovitz said the current proposals in the Bill said that there could be between five and seven persons appointed in each province. The Chairperson of the Tribunal would then delegate a team of three members each, to go where ever they were needed, to make a provisional decision and then come back to the full Tribunal to present the case and the decision. However there was a legal risk if those who had not heard the case had to decide upon it.

The Chairperson said the three delegates would make a decision for the cases they attended to, but at the end of the day the decision would be considered as a decision of the full Rental Tribunal. When the full Tribunal met, the delegates would make recommendations and there should be recordings of what transpired, so the regulations would deal with that. What was important was that the decision was made by the collective, as led by the chairperson of the Tribunal.

Ms Njobe said that when implementing this legislation there could be cases of arbitrary evictions, which was why the Committee felt it was important to define arbitrary evictions. If that definition was removed, she wondered how matters would be handled.

Ms Njobe said that it was unlikely that the Tribunals would be entirely independent from the MECs, as they would have to be funded by the provinces.

Mr Mokgalapa said it was clear that the proposal from the LRC was to strengthen the role of the Tribunals, which was carried through in the proposals also for timeframes as to when regulations must be in place. He said, in regard to the definition of "arbitrary eviction" that if these words were not in the main text of the Bill, then there should be reasons advanced for why the definition was included. If it was to be included, it was necessary to use wording that would not lead to unintended consequences.

Mr Kahanovitz said he foresaw a progression, the first Tribunals were within the Department, and Tribunals were going to grow enormously, so there needed to be a framework to allowed that. He said that section 16 dealt with penalties.

The Chairperson said the Tribunals were akin to boards, and were not an agency (like the Housing Development Agency). The appointments were not permanent but part-time.

Mr Kahanovitz said the Tribunals had acknowledged that they would be getting busier and busier and would grow as the CCMA had, to the extent that it might be of benefit that the Tribunal eventually comprise full and part time people. The Chairperson should be well informed enough to allocate the people to each dispute. He agreed that the Tribunals differed from the Housing Development Agency, and their members were similar to adjudicators at the CCMA.

South African Local Government Association (SALGA) submission
Ms Moloi, Representative, SALGA< said that the mmunicipalities had expressed concerns that the requirement to set up Rental Housing Tribunal Information Offices (RHTIO) created costs for local government. Provincial departments would incur costs associated with the implementation of the Act, including publication of the Bill for public comment, information sessions and translations. SALGA recommended that the Amendment Bull should adequately address the issue of the cost to municipalities of establishing an RHTIO.

Regarding the regulations being issued by the Minister – and it was noted that this would no longer be by the MEC – it was pointed out that municipalities fell under the category of ‘landlord’, in cases of municipally-owned rental stock. The geographic clause would also be a problem. The Minister also had only 12 months after the commencement of the Rental Housing Amendment Act to issue regulations, and this short timeframe may be problematic as the scope of regulation was very wide, and since municipalities had to be consulted and also given the dynamic nature of the rental market.

SALGA was concerned that the Bill did not take into account backyard dwellers. There was a requirement for all tenants to have written leases enforceable in the Tribunals or competent court. The application of this requirement would have far-reaching implications as most backyard tenants had informal arrangements. Backyard dwellers were the largest housing sub-sector in South Africa. The principal Act was not explicit and if there were intentions to cover informal backyard rental, then the Bill should be explicit and cater to the unique aspects of informal rental. It was questioned if the Minister’s regulations would have separate norms and standards for different categories? Enforcement of norms and standards for backyard rental would be costly and required significant resources, and the question was asked if this responsibility would rest on municipalities.

Discussion
Mr Mokgalapa said the costs were not an issue, as at the end of the presentation it was stated that SALGA said the Bill adequately addressed this. In terms of norms and standards, he stressed that nothing was taking away the roles of municipalities in proclaiming by-laws. SALGA brought the topic of backyard dwellers to the Committee and this was an important point, as most municipalities were clearly battling with addressing it. However, he stressed that national government, equally, would not be “jumping in to rescue local government” – there were certain issues and responsibilities that SALGA must ensure that were addressed through local government bylaws.

Ms Borman said that SALGA was implying insufficient time for consultation, but said that there had been enough time. It must be remembered that the legislation covered the whole rental market, from Constantia to the shacks. Whilst the main emphasis of the current submission had been on backyard dwellings, she wanted to know how SALGA felt about the rest of the Bill. She commented that the submission seemed to suggest a problem with the Minister, but she made the point that although they were not working full-time at grassroots level, Members of Parliament were able to make input based on what they picked up from their oversight.

Ms Njobe said whatever agreement was made by the landlord and the backyard dweller, that was a contract, and there was no reason why that simple agreement should not be reduced to writing. The aim of the Bill was to better control the rental sector and to improve norms and standards, and to deal with conflicts between landlord and tenant.

The Chairperson said Chapter 3 of the Constitution was clear. She highlighted that the Minister reported to Parliament on the implementation of the Bill. The Bill was not contrary to the Constitution. However, she repeated concerns that if regulations tampered with existing legislation, it caused problems and complaints. The Department consulted local government when drafting legislation and the local government would be consulted again when regulations were being drafted. This was the obligation of national government.

The Chairperson asked if SALGA had consulted the communities or the councillors they were representing, and where community input was given. There should be a record that municipalities were consulted. She asked what municipal bylaws covered backyard dwellers. There was a gap indeed as national government had not yet dealt with the matter of backyard dwellers, but that did not mean that local government should not do its job. She thought that it would only encourage exploitation if it was accepted that backyard dwellers were not expected to sign lease agreements. She pointed out that many of them in fact were educated, had accounts or contracts with banks, and were even business owners.

The Chairperson did not think that costs were an issue, for it had already been agreed that all municipalities must establish fully-fledged housing offices, and should be assisted if unable financially to do so. MinMEC would be involved.

Ms Moloi wanted to stress that SALGA supported the legislation. The role of national government was by no means being contested nor was the legislation or the processes followed being questioned. However, some issues that were causing concern in the public were being raised. The backyard dwellers felt they had not been catered for in the Bill.

Ms Allison Tshangana, Human Settlements Specialist, SALGA said that, in relation to the Minister being empowered to make geographic specific regulation, it was clear that the country was faced with extensive exploitation and abuses in the backyard rental sector. SALGA believed it was the role of national government to step in and ensure that all peoples’ rights were protected, whether in the formal or informal market. There was tension between ensuring rights and ensuring the market functioned. Ministerial regulations should create a threshold, and that was where SALGA and national government would then be working together, to fill in any gaps of the regulations with the bylaws. Backyarders were a very sensitive area, as intervention by government had unintended consequences in Gauteng for example.

Empowerment Rights submission
Ms NaNandi Simone, Representative, Empowerment Rights, said her last submission to the Committee was in 2011, and would be raising similar concerns today, based on her own experience and the experiences of other people whom she knew personally. When she came to the Committee in 2011, she had just been evicted, in a highly traumatic manner that resulted in her property being thrown into the streets, where it was stolen or rain-damaged. She said that although there was credible legislation in place, this was a reality still today. When she raised the issue in 2011, the Rental Housing Tribunal was asked by this Committee to make contact with Ms Simone, but they had never done so.

She wanted to clarify what her submissions meant, in saying that the present system favoured the landlord. It was not the wording of the legislation but the way it was implemented that was problematic. The Chairperson was correct when she said that people were not doing their jobs and she stressed that the legislation needed to be as effective on the ground as it read on paper. In the event of a tenant defaulting on payment, the responsibility landed with the tenant, but there should be more balance in responsible. For instance, the landlord needed to undertake better assessments; checking the ICT report was not enough, and perhaps there was a need for retrenchment insurance or some other security. Sometimes, leases provided for sureties, but this was hardly ever exercised.

Ms Simone said in most of the cases it seemed the courts favoured the landlord. When a tenant defaulted in the first month, or gave notice to the landlord, landlords would often “shoot themselves in the foot” by rushing to court, instead of perhaps settling for a lesser rental or releasing the tenant from obligations. Very often, people were not empowered and did not understand their rights, and the process could drag on for months, only benefiting lawyers.

Ms Simone fully supported the principles behind rental Tribunals but she said that they needed to be more involved than at present. Middle to lower class people were not aware of the existence of Tribunals, and perhaps it should be made a rule that courts should not accept applications from this grouping unless they had been through the Tribunal process first.

She suggested that the roles of the Sheriff should also be covered in the Bill. Sheriffs should be held accountable for how they treated people and executed their orders. In practice, Sheriffs tended to hire in casual labour to assist and this led to lack of accountability and thefts, whilst lack of consideration for weather conditions, and bullying tactics, further dehumanized those being evicted, and it must also be remembered that pets and children were also being traumatized by the process.

She said that although emails and text messages were becoming more and more popular forms of communications, and were regarded as permissible service forms in some instances, the Bill failed to make mention of them. Often, tenants and landlords would communicate and make arrangements via e-mails, yet when the matter went to court, these were not regarded as admissible. In townships the situation was cruder as a tenant could simply be “kicked out” by the landlord. Finally, it seemed a lot of magistrates were not well versed in PIE Act or did not have the patience to deal with it.

Discussion
Ms Borman said the presentation painted a good picture for the Committee of the real suffering. The Committee hoped that this legislation would take care of the vulnerable people. She agreed with comments on e-mails at least being considered. She asked Ms Simone if she had the impression that there were more court cases. Tribunals had reported that 80% of their cases were resolved and therefore that the Tribunals were serving their purpose in reducing costs for the parties involved.

Mr Mokgalapa said he thought that the word ‘redress’ was very important, to strike the balance between rights and responsibilities of tenants and landlords. This was why the Minister was already required to report on the impact of the legislation to the Committee. He agreed with Ms Borman that emails would constitute “writing” for the purposes of a lease, but SMSs were questionable and verbal agreements were completely out of the question. An email also had to be structured in a certain way to ensure it had legal standing.

The Chairperson said it was possible, with emails, to scan and sign, and said if it was not signed it would not be accepted. However, the drafting of the regulations should give consideration to this point.

Ms Simone said in other areas emails had become legally acceptable, and today there were so many people who used email as the norm of communication, it was worth looking into.

Ms Simone suggested also that, if possible, perhaps there could be regulation around the standardized form of lease. In many court cases, the length of lease affected the court’s decision. Leases should not be long, drawn-out documents, but simple.

Ms Simone concluded that the Tribunals were quick to solve the easy cases, but cases in urban areas were becoming more complex, and many people did not even know what Tribunals were. She urged again that there should be better monitoring of sheriffs, with a code of how they worked and they should be trained in dealing with legislation.

Just Letting Submission
Ms Caroline Parsons, Member, Just Letting, took the Committee through her submission. The proposed amendment for Section 1A, with the definition of ‘arbitrary eviction' needed to be clarified, for it was necessary to set out more clearly what this meant, what steps and processes must be followed, and to whom one would submit the request with all the supporting documents.

The proposed new section 4A(3), which dealt with the rights and obligation of tenants, spoke of refunding the tenant with the deposit within seven days after vacating the property. However, in the majority of cases, municipalities, Bodies Corporate and Sectional Title Management companies did not send out services accounts within the seven or 14 day time frame specified in the Act. The agency had to settle those accounts from the tenant's deposit, before refunding the tenant. Since they could not do so, this meant that effectively, letting agencies would not be able to comply with this Bill.

She said that entry inspections should be compulsory, with an inspection by the tenant and landlord, both present together. If the tenant failed to show up at the agreed time of the inspection, that action would be deemed to be an acknowledgement by the tenant that the inspection notes and photos were true and accurate.

She pointed out that the new section 4A(8) did not allow for reasonable administration fees, such as telephone calls, letters being drafted, staff driving to the property to establish if the tenant is still living there and others. In regard to the new section 4B(4), which spoke of exit inspections, it should be compulsory that the property be inspected 24 hours after the tenant had vacated, and once again that inspection should involve both landlord and tenant. It should be emphasized that the property should be empty during the entry inspection and the exit inspection, for often damage was hidden underneath rugs and behind pictures.

She felt that the new section 4B(5)(b) needed to be amended to mirror the amendment to the section dealing with the rights and obligations of tenants, the new section 4A. The period of seven days was too long – and she suggested it should be 48 hours, for properties were vandalised too often when left empty, and the tenant had the right to a speedy resolution and deposit refund.

She proposed that section 4B(11) needed clarity on exactly what "fit and suitable to live in" meant.

She noted that the Bill should protect both parties as it was felt that currently the legislation was biased against the landlord. She shared Ms Simone’s concern that nobody was benefiting except lawyers fighting the cases.

She said that the roles of the Tribunals needed to be strengthened.

Discussion
The Chairperson appreciated the grassroots input of the presenter but suggested that she reread the Bill. The Committee had tried to address the costs of pursuing actions, and make the courts the very last resort, even including an interim appeal process. The Bill also aimed to ensure that leases were straight forward documents and aimed to do away with the bulky documents, but it was important that they be in writing.

Ms Parson said according to the Consumer Protection Act, all the rights of the tenants had to be fully detailed in the lease.

Ms Njobe said the Bill required regulations that would deal with the format of the lease, and that document should not be long and drawn out. The final detail of the lease was left to the parties.

Ms Parsons agreed that a lease should not be a long, drawn out document, but it should focus on the core matters outlining the obligations, responsibility and rights of the tenant and landlord.

Mr Mokgalapa said the issues were often about the things that were not included in the lease. The shorter version of the lease would solve a lot of problems, and leases would have to be in writing in future.

Mr Mokgalapa noted the issue, which would be taken into consideration, of the strengthening of the Tribunal and the appeals processes to avoid cases ending up in court, although there were some cases that would ultimately end up in court.

Ms Borman said the public hearings were for Parliament to get an input from the public; all the inputs were to be taken into consideration by the Committee and with the legal teams. The aim was that the Bill should advantage, and be accessible and user-friendly to every citizen.

The Chairperson repeated that the Committee would reply to every submission and inform the proposers why submissions were or were not included.

Rental Housing Tribunal - Western Cape
Mr Igshaan Higgins, Member, Western Cape Rental Housing Tribunal, said the Western Cape Rental Housing Tribunal supported the amendments to the Bill but with one exception. It was concerned about the appeals process. He said that the wording of the new section 17A(2) raised the question whether there were instances when no appeals would be allowed. If so, that was clearly not desirable.

He felt that the wording of the new section 17A(3), dealing with appointment of adjudicators, was weak. The new section 17A (5) could not be supported as such a suspension would leave the parties in limbo, considering that Section 17A(1) allowed parties 21 days after the receipt of a ruling to lodge an appeal.

Experience had shown that relationships between landlords and tenants became very emotional, personalised and principled. In many cases it was not about the small amount of money involved but about the principle of who was right or wrong. The opportunity to appeal aggravated these situations.

The principal Act stated that a case must be finalised in 90 days. He thought introduction of this process would further delay the finality and certainty, and the one party may just appeal to frustrate the other.

He noted that the Tribunals rendered a service very similar to the Small Claims Court, from which there was no right of appeal. Appeals also would increase the expenses of the Western Cape Government. The experience had shown that the majority of the complaints before Tribunals were from tenants seeking a refund for their deposits, and most of these cases were from low income groups. Finally, he asserted that in fact none of the Tribunals were complying with the 90 day requirement, and adding an appeals layer to that would lead to the process dragging out for  six months and longer. Most complainants could not afford that.

Discussion
Ms Borman asked whether the CPA had an impact upon the current Bill.

Mr Higgins said, according to the CPA, a tenant could sign a lease for 12 months but might decide, two months into the lease, to resile from it. At the moment, the tenant would merely have to give reasonable notice. The CPA allowed for only a reasonable penalty to be imposed. However, the “penalty” necessitated a judicial body decision – whether Tribunal or Court – who had to apply its mind to what constituted a reasonable penalty.

Mr Mokgalapa said Members had been asked throughout the day to consider all other relevant legislation. He thought the comments on the appeal were food for thought and the Committee would seriously consider whether to proceed with this, or whether perhaps to have a threshold.

Mr Higgins suggested that other legislation was relevant, including other legislation on leases and penalties.

The Chairperson said the issue of resources was addressed by the legislation, for there was a transition period of 12 months for implementation of the legislation. The question of time frames had been extensively discussed. She agreed that the Court was the relevant place to deal with evictions.

Mr Higgins said both the High Court and Magistrate Courts dealt with evictions, and, from a cost perspective, it was usually Magistrate Courts mostly dealt with evictions.

The Chairperson said this Committee would ensure that legislation empowered communities. She thanked everyone for input, stressing the importance of public participation.

The meeting was adjourned.